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Labour- dependent contractor? Contractor? Employee? HELP!

I am at my wits end and can't seem to track down any useful information. Although I found a thread on this site that was years old that seemed somewhat helpful. Please help!

I am working for a company. I was "Hired" as a "contractor". I responded to a help wanted ad, was trained to follow their policies and to do the job that they had created and was given a title at this company. After a few months I was invited to be hired as an employee and moved from working at home to working in the office. My job essentially didn't change at all, I just did it in an office they owned instead of from my house. Then after a month or two, they decided that they were closing the office and that I had to go back to working as a "contractor" (ie from home with no rights).

I do not work for any other company and I am completely dependent on this company for income. I have been working with them since May 2010. I have been given a "promotion" and have people working under me, but they are people that were hired by the company, not by me. I am made to follow their codes and do not negotiate each contract. They simply send me work with no negotiation.

I am in a pickle because I have been made to sign a contact which basically says they will pay me whenever. I am generally given no indication of when I am going to be paid, although they try to pay every two weeks. THe week before last I was supposed to get a pay cheque, was told that I would instead get it by friday. On friday they still did not have a cheque for me. Although it is there now.

It is increasingly difficult to budget, and as I am the sole earner in my household this is causing me great stress, however I feel like I don't have any rights to wave in front of them. I really like the job, but this is starting to stress me out beyond a reasonable level.

But am I really and independent contractor? Would I be a dependent contractor? I suppose these are important things to know for tax purposes as well, but truth be told, I was thrown into this job, I didn't have an independent business before they hired me and really don't know anything about all the legalities.

I feel that to a certain extent they are attempting to cover their asses by having us as contractors, since they are a relatively small business and might not have a lot of money and they are less accountable to us this way.

Comments

I'm no expert in this, though my job does bring me into contact with these two categories (staff vs. contractor).

As a contractor, you should have no facilities at your employer's workplace (no office, for example, or they don't provide your tools) and the work that you do for them should not be hourly work (eg: they may contract with you to process 1000 forms, or to build an outbuilding, but not to answer a phone for 40 hours a week) nor should they dictate hours to you, notwithstanding work you have to do at their premises.

And sadly, if you're a contractor then they're going to pay you through purchasing, not payroll, and that means being subject to their terms (my employer has 45 day terms -- you could get paid, if you invoice today, any time between now and March 22.)

As far as Revenue Canada is concerned, there is no doubt whatsoever that you are an employee, not a contractor. You meet almost none of the tests for a contractor.

But what good that will do you is another story. Many industries are rife with this scam- especially construction, forestry, and agriculture. but it is everywhere.

Employers know there is almost no enforcement. So it generally comes down to whether or not you want to keep your job.

You have an additional problem as well. The outfit you work for is skating on the edge financially. I dont care what they tell you, or what they beleive themselves. EVERY employer knows that being late with payroll is a very bad sign and unerves your employees- even when they beleive the stories the boss tells them about why its all OK. "We've got this money coming late... blah, blah."

Bringing you into an office that then closed was a bad sign too. But not as bad as chronically late with payroll.

I'm going to qualify a bit over ringing the alarm over their payroll habits. It is possible you are in a one-off situation with them... and being late with you may be more a consequence of crisis management. [IE, there is only one of you, and they dont get around to you, etc.]

But it sounds like they have some regular hourly employees- even if they pay them as contractors too. If people have routine work hours, and there is a pay period, and they are late paying those folks too- that is an unequivocally bad sign.

munchie wrote:

I have been given a "promotion" and have people working under me, but they are people that were hired by the company, not by me. I am made to follow their codes and do not negotiate each contract. They simply send me work with no negotiation.

I feel that to a certain extent they are attempting to cover their asses by having us as contractors, since they are a relatively small business and might not have a lot of money and they are less accountable to us this way.

They have you as contractors because it saves them payroll taxes- like 7% of your wages for their share, plus workers comp. [Which is even more illegal for them to avoid, but typically not enforced unless there is an accident.]

The promotion, being under their direction, and directing others all make you an employee. When you were working at home that does not necessarily make you a contractor in Revenue Canada's eyes. If from home you were directing other people that they hire and fire, you were an employee then as much as when you were in the office.

Not to mention that if Revenue Canada did audit them, the very fact that they called you an employee without your job changing would in itself deem you to have always been an employee.

Are you aware that as a self-employed person you owe 10% of your pay for CPP? If you arent declaring the income you dont want to be talking about that here, but thats another exploitation trap. You get used to and dependent on not paying taxes, and your employer is the actual beneficiary.... because they can pay you less knowing that is the norm. You are the one taking the risk [if you get caught, you'll get the shaft, and they'll get a wrist slap.... if Revenue Canada can even get money out of them], you arent eligible for EI, and nothing is going into your CPP.

I was stuck in a very similar situation a few years back (I was working for one of the division of the Thomson publishing empire). The correct agency to contact to get a determination of your status is actually the EI (Employment Insurance) Commission. From what you have described above, I am almost positive they will agree with your interpretation that you are an employee rather than a contractor.

There are, however, a few things that you have to consider before getting a final determination. If they make such a determination, they will go after the company involved to get the employer's share of CPP and EI contributions that they have been avoiding, however they will also seek your share... in my case vacation pay that was due me was never paid out, the company used it towards my share of contributions and then deducted the remainder over the next couple of months... while the company has, in effect, been defrauding both CPP and EI, there is almost zero chance of any other action being taken against them (unlike the policy of vigorously prosecuting individual EI claimants who are likewise accused of "defrauding" the system).

Although the EI bureaucracy will make the determination, they will also make it clear to you that they will not, unless things have changed radically since my experience with this, in any way become involved in assisting you if they company decides to retaliate by either firing you, or cutting pay etc. You will be on your own (although if they do fire you, or [as in my instance] you quit because they took other retaliatory steps against you, this will likely not be held against you if you find yourself applying for EI benefits). Here in Alberta, the Ministry of Labour refused to even talk to me, I am not certain if the equivalent Ministry in B.C. will offer any more support.

Finally, don't sweat it even if you have signed some form of contract... I had to do the same thing, and it is considered to be a contract signed under duress and unenforceable from the employer's end.

Sorry to hear someone else is stuck in the same position I was... it still raises my blood pressure to just think about it. Parasitical fuckers.

Not directly in response to your question but this situation does raise a red flag for me in the unfortunate event that you ever get hurt at work.

If your employer says you are an independent contractor AND you're not declaring income (if that is the case), you would have severe difficulty ever successfully claiming workers' comp. This is a huge problem when there are catastrophic injuries that eliminate workers ability to work in their trade, or in heavy labour, or at all. The problem goes away to a large extent when there is declared income from only or at least primarily one source. That`s likely the only way you would ever be able to get Compensation to apply their industry organizational test, ie to challenge the employer`s assertion that you were essentially self-employed. If you have declared earnings -- at least to some reasonable extent -- you can always go back later and refile your taxes, if a major injury occurs, and eat the penalties out of your increased compensation proceeds. Not to be alarmist too but in my experience these situations almost always involve high risk occupations -- that`s a big reason why these employers don`t want regular employees, due to the high cost of workers comp in these rate groups.

NB this is strictly a workers' comp lens however -- I cant comment on how declaring earnings as a contractor might impact on other potentially huge issues, such as civil or criminal liability for injuries to others that may occur on your job site... also, workers comp in BC I believe pays a lot less than it does here in Ontario, so it might not be worthwhile to you in any case.

Itès a question of how much compensation is actually ever paid out to injured workers. I donèt have the numbers but from what I have heard, after years of rabid right-wing partisan OIC appointments, BC employers WC exposure is exponentially lower than it is in Ontario. A friend of mine who is a lawyer in the field recently moved here because there is simply no work in BC -- employers no longer even bother to hire counsel for WC -- whereas here, on the workers side we are not infrequently up against the most costly Bay St firms.

I am at my wits end and can't seem to track down any useful information. Although I found a thread on this site that was years old that seemed somewhat helpful. Please help!

I am working for a company. I was "Hired" as a "contractor". I responded to a help wanted ad, was trained to follow their policies and to do the job that they had created and was given a title at this company. After a few months I was invited to be hired as an employee and moved from working at home to working in the office. My job essentially didn't change at all, I just did it in an office they owned instead of from my house. Then after a month or two, they decided that they were closing the office and that I had to go back to working as a "contractor" (ie from home with no rights).

I am an 'expert' in this area. As an employer of both employees and contractors, I can confirm that you are an employee, not a contractor. The 'contract' you signed is meaningless.

As an employee, you are entitled to EI and CPP contributions from your employer federally and holiday pay, stat hols and workers compensation coverage at no cost to you.

Any wages paid to you are considered net of deductions by CRA and your employer is liable for remittance of all deductions for federal tax, provincial tax, employment insurance and CPP (both worker and employer contributions for EI and CPP).

YOU are completely covered. The onus is on your employer to meet the contractor threshold with CRA and you do not meet that threshold. Not even close. If the employer gives you a hard time, simply apply for EI and the CRA will deal with it.